A new zero-down option, plus more ways to put down less on your home

This week, Bank of America announced a “no-down” mortgage program called the Community Affordable Loan Solution, aimed at closing the racial homeownership gap. It’s the latest of various no- and low-down payment mortgage options, as growing numbers of buyers seek more affordable paths to becoming homeowners.

Government-backed options such as FHA loans are among the most well-known, offering buyers more lenient credit score requirements and down payments as low as 3.5% – a good fit for many first-time homebuyers. VA and USDA loans also have varying low and no down payment options for qualified military veterans and homebuyers in rural communities. 

But there are also a number of conventional options that can offer similar benefits. Fannie Mae’s HomeReady program, for example, offers first-time buyers who meet certain income requirements the option to put down as little as 3%. Fannie Mae’s standard 97% LTV mortgage offers similar terms to buyers without the income restrictions. 

Other non-traditional options such as rent-to-own and down payment assistance programs can also make it possible to buy a home without having a significant down payment saved. While rates, inflation, and home prices may be out of your control, it’s exploring other tools and solutions that can help to make homeownership more affordable.

– Robert Heck, Vice President of Mortgage @ Morty

Which low-down payment option is right for me?

Home ReadyFHAConventional 97
Gov’t Backed✔️x
Min. Down Payment3%3.5%3%
Cancellable Mortgage Insurance✔️No, if <10% down✔️
Required Education Course✔️✔️
DTI Limit50%43%43%
Min. FICO score620+500+620+
Total Loan Limit$647,200$420,680$647,200
Qualifying Income Limit80% AMI*NoneNone
*AMI= Area Median Income.
Chart info based on the majority of typical cases.

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